N’DJAMENA, 7 February 2021 – Chadian President Idriss Deby Itno has requested a “common framework” be set up between the Paris Club and the G-20 for the treatment of debt.
The “common framework” was set up in 2020 between the group of the world’s 20 richest nations – at the time under the leadership of Saudi Arabia – and the Paris Club to address the insolvency risks by the countries most affected by the pandemic-induced economic slowdown.
China, one of Africa’s main creditors, has already indicated that Beijing is willing to join such a common framework.
Chad is already beneficiary of the Debt Service Suspension Initiative (DSSI).
Donors will probably extend the moratorium that is currently extended until the end of 2021 to some 50 countries worldwide, a majority of them African.
On Friday, Chad became the first country in the COVID-19 era to ask for a restructuring of its debt from its major public creditors, as well as a support agreement with the International Monetary Fund (IMF).
Chad’s debt is 42 percent of its GDP and is approaching a liquidity crisis due to a high debt burden and low oil revenues.
Chad had used projected oil sales to back most of its loans, including a third of its very large debt which is owed to the Swiss-based trade Glencore.
“Chad and the IMF [agreed] on a new four-year economic reform program supported by an External Credit Facility and an Extended Fund Facility, amounting to $560m,” Chad’s finance minister Tahir Hamid Nguilin late last month.